Jan. 6 (Bloomberg) -- Republican presidential candidate
Mitt Romney is heading into the New Hampshire primary faced with
a study that says his tax plan would add $600 billion to the
federal deficit in 2015.

A study released yesterday by the nonpartisan Tax Policy
Center in Washington compared the revenue that Romney’s tax-code
changes would generate with the revenue the U.S. is expected to
collect under current law, which assumes that several income tax
cuts will expire as scheduled at the end of 2012.

Though the Tax Policy Center said Romney’s tax plan would
“reduce federal tax revenues substantially,” the budget hit
isn’t as severe as some of his competitors. The same group
previously said former U.S. House Speaker Newt Gingrich’s tax
plan would increase the deficit by $1.3 trillion and that Texas
Governor Rick Perry’s proposal would boost the shortfall by $995
billion.

Romney’s proposal “does more changing around the edges
than wholesale getting rid of things,” said Roberton Williams,
a senior fellow at the Tax Policy Center. “He would, for
instance, maintain the tax on capital income for high income
folks, which brings in a lot of money.”

Romney, a former Massachusetts governor, is hoping to
solidify his front-runner status in the Republican race with a
victory in New Hampshire’s Jan. 10 primary after winning the
Iowa caucuses by eight votes on Jan. 3. Former U.S. Senator Rick
Santorum of Pennsylvania finished just behind Romney in Iowa.

‘Pro-Growth’

Andrea Saul, a Romney campaign spokeswoman, said in an e-mail yesterday seeking comment on the center’s report that he
has proposed “dramatic spending cuts to reduce the deficit and
pro-growth tax policies that permanently extend the Bush tax
cuts, dramatically cut the corporate tax rate to create jobs and
deliver real tax relief to middle-income taxpayers.”

Romney’s economic plan calls on Congress to immediately
lower the top corporate tax rate to 25 percent from 35 percent.
He has said he would be open to additional rate cuts if they are
accompanied by measures that would broaden the income base.

He would move the U.S. to a so-called territorial system of
taxation, in which the government taxes only domestically
generated corporate income. Republican leaders in Congress have
shown interest in this concept. House Ways and Means Chairman
Dave Camp, a Michigan Republican, introduced a proposal in
October that would shield 95 percent of profits earned offshore
from taxation in the U.S.

Individual Taxes

For individuals, Romney would lower the maximum tax rate
over time, though he hasn’t specified a rate target. He would
eliminate the estate tax and make permanent the current 15
percent rate on dividends and capital gains. Taxpayers with an
adjusted gross income of less than $200,000 wouldn’t pay any
taxes on capital gains or dividends.

Romney’s tax plan, unlike those of some of his Republican
opponents, isn’t an attempt to escape the confines of the U.S.
tax code. It doesn’t give taxpayers the choice of sticking with
the current tax system or paying a flat tax instead, as Gingrich
and Perry have proposed. There isn’t a national sales tax like
the one businessman Herman Cain outlined before his ended his
campaign in early December amid allegations of sexual
indiscretion.

“My administration will make America the best place in the
world for entrepreneurs, inventors and job creators,” Romney
said at a campaign event in Davenport, Iowa, on Dec. 27. “I’ll
lower and simplify taxes, especially for middle-income
Americans.”

The study doesn’t take into account a $1.2 trillion
reduction in federal spending scheduled to take effect in 2013.
Those savings won’t prevent Romney’s proposal from increasing
the deficit, Williams said.

He said the $600 billion revenue reduction under Romney’s
proposal would happen in 2015 while the $1.2 trillion spending
cut would be spread out over a decade.